Wells Fargo Shifts Loan Officer Pay to Highlight Mortgage Quality

According to an internal presentation obtained by Bloomberg, top mortgage lender Wells Fargo plans to incentivize loan officer pay based on loan quality.

While I wasn’t able to track down the presentation, the publication noted that mortgage salespeople would receive extra compensation for submitting “complete loan applications” to loan processors and mortgage underwriters within a five-day period.

In return for their speed and organization, Wells Fargo would pay salespeople an additional 0.03% on each loan that meets the requirements for the new rule.

On the example $400,000 loan included in the article, it would bump pay up another $120, on top of the $1,720 they reportedly earn before the bonus.

For the record, that $1,720 equates to 0.0043%, in case you were wondering how much Wells Fargo reps make for originating your home loan.

Of course, that’s just an example, and it could well vary quite a bit depending on a number of factors, such as the type of loan, volume, position, etc.

Sign of the Times

The move by Wells is clearly a sign of the times, which is a mix of both extraordinary demand for mortgages and much more stringent underwriting guidelines.

Back in the day, before the boom turned to crisis, many lenders provided incentives to loan officers who originated the riskiest types of loans, largely because they were sold off on the secondary market in a game of hot potato.